Buying office space in Dubai: a guide for investors

Buying an office in Dubai follows the same broad route as buying an apartment, with a few differences that matter. This guide covers the essentials for investors, particularly those buying off-plan.

Where foreign buyers can own

Foreign nationals and overseas companies can own property outright in Dubai's designated freehold areas. Business Bay is one of them, which is why it attracts both local and international office buyers.

How off-plan purchases work

When you buy off-plan, you reserve a unit, sign a sale and purchase agreement with the developer and pay in instalments tied to a payment plan. The purchase is registered with the Dubai Land Department on its interim register, known as Oqood, until the building completes and the title deed is issued. Payments go into a regulated escrow account for the project.

The costs to budget for

• DLD registration fee: 4% of the purchase price, plus administrative charges.
• VAT: unlike most residential property, commercial property in the UAE is subject to 5% VAT on sale. Buyers registered for VAT may be able to recover it, and rent on a commercial lease is also subject to VAT where the landlord is registered.
• Service charges: an annual charge per sq ft for the building's upkeep, set once the building is operating.
• Fit-out: shell-and-core units need fitting out before they can be let or occupied, which is a real cost to plan for.

What to check before committing

• The developer's delivery record, since off-plan risk sits mostly with the developer.
• The payment plan and how much is due before handover.
• The exact size and specification of the unit, and whether it is delivered fitted or shell and core.
• Realistic rent for the unit, based on comparable Grade A space nearby.
• Your tax position at home as well as in the UAE.

This is general information, not legal or tax advice. Take professional advice on your own circumstances before buying.